Google’s loss in the Epic case—a federal jury yesterday found unanimously that Google’s rules for the Android Play Store broke U.S. antitrust law—is seismic stuff for multiple reasons.
Firstly and somewhat incredibly, this is the first time a Big Tech firm has lost an antitrust case in the U.S., as competition wonk Matt Stoller pointed out in a blog post yesterday. Antitrust cases have obviously effected change in the sector before—see Microsoft’s 2001 settlement with the Justice Department—but this is different. The verdict may eventually have a broader impact across Silicon Valley, though right now it’s Google’s problem.
Stoller: “Google is likely to be in trouble now, because it is facing multiple antitrust cases, and these kinds of decisions have a bandwagon effect. The precedent is set, in every case going forward the firm will now be seen as presumed guilty, since a jury found Google has violated antitrust laws. Judges are cautious, and are generally afraid of being the first to make a precedent-setting decision. Now they won’t have to. In fact, judges and juries will now have to find a reason to rule for Google.”
Here’s another key point from that piece, relating to the wider implications of nailing Google over “tying”—the antitrust issue that was also central to that vintage Microsoft case: “The specific legal claim here was about how Google forced firms relying on its Google Play app store to also use its Google Play billing service, which charges an inflated price of 30% of the price of an app. Tying is pervasive throughout the economy, so you can expect more suits along these lines.”
More specifically—but no less dramatically—Epic CEO Tim Sweeney may now get his desired outcome of the court forcing Google to let the games firm bypass the Play billing system in the U.S., when selling its games.
That’s not yet a sure thing, as Judge James Donato still needs to decide on the remedies he’s going to impose on Google, which is going to appeal the verdict anyway. But it’s going to be really hard for Google to claim that such an opening-up of the Android ecosystem is out of the question, given that it’s going to have to make similar changes elsewhere very soon.
As of early March 2024, Big Tech services that the European Commission has designated as “gatekeepers” will have to comply with tough new competition obligations contained in the minty-fresh Digital Markets Act. Both Android and Google Play have been designated, which will vastly boost the viability of third-party app stores that could charge far lower commissions than Google’s 30%. In the case of Apple, it will force the company to allow third-party app stores for the first time, with the same ultimate effect. Maybe Sweeney will even get the cross-platform gaming app store he’s been advocating for.
The European app scene is going to look very different in a year or two, and now Americans are closer to being able to enjoy the same changes. More news below.
David Meyer
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NEWSWORTHY
Microsoft ♡ unions. Microsoft has agreed to remain neutral in unionization efforts, as part of a deal with the AFL-CIO union federation that also has a lot to say about AI. As CNN reports, Microsoft will consult with workers when developing AI technology, and train workers and students on the latest developments in the field. Microsoft president Brad Smith: “By working directly with labor leaders, we can help ensure that AI serves the country’s workers.”
Apple tap-and-go. Faced with EU antitrust charges, Apple has reportedly offered to let rival payment providers, er, tap into the tap-and-go payment functionality on iOS devices. According to Reuters, the European Commission will probably see what rivals and customers have to say about the proposal before making a decision on whether to accept it.
BeReal evolves. BeReal, the much-hyped social app that’s designed for authenticity, is now used by 13% of U.S. teens, according to Pew Research. As TechCrunch reports, the French app has recently gained a bunch of new functionality, with the most recent being private groups and a Live Photo-esque “Behind the Scenes” feature that shows a video of the few seconds leading up to when the user takes a photo.
SIGNIFICANT FIGURES
—The drop in Oracle’s share price on Tuesday, the morning after the company issued a gloomy cloud growth forecast that it blamed on supply constraints.
IN CASE YOU MISSED IT
Box CEO Aaron Levie’s top takeaway from OpenAI meltdown: ‘Don’t have weird corporate structures’, by Kylie Robison
Google VP Sissie Hsiao: the Gemini AI demo video ‘is completely real,’ though Google ‘did shorten parts for brevity’, by Kylie Robison
Most companies using AI are ‘lighting money on fire,’ says Cloudflare CEO Matthew Prince, by Sage Lazzaro
Khan Academy’s founder says AI ‘coaches’ will soon submit essays to teachers instead of students, by Alexandra Sternlicht
Sam Altman says he doesn’t mind being humanity’s lightning rod for AI fears during his first appearance since surprise firing and return, by Eleanor Pringle
New Hampshire military contractor becomes first plant to get CHIPS funding as U.S. steps up its manufacturing war with China, by the Associated Press
Tucker Carlson, fired by Fox earlier this year, launches his own streaming service, by Chris Morris
Elon Musk says he’s prepared to go to prison if U.S. government tries to censor X, by Christiaan Hetzner
BEFORE YOU GO
Whither Section 702? Wired has a good piece on the dueling legislative proposals for what to do with Section 702, the soon-to-expire surveillance program that’s meant to allow the monitoring of foreigners’ communications, but that also happens to scoop up a ton of Americans’ communications as well.
As the article explains, the House Judiciary Committee’s proposal would (finally!) mean the FBI would have to get warrants before accessing Americans’ communications, rather than just paying companies for the information, as currently happens. The House Intelligence Committee’s bill would offer no such protections, while actually expanding the variety of companies that would be forced to hand over Americans’ communications, to include everyone from co-working spaces to hotels that offer internet access.
White House advisors are apparently coordinating intelligence agencies’ lobbying efforts to advance the latter bill.
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